Wealth, Consent, and Lifeboats

1) Multiple times throughout Posner's piece, Posner asserts an assumption about wealth and productivity: "the buyers $10,000 was in all likelihood accumulated through productive activity -- that is, activity beneficial to other people besides himself, whether to his employer, customers, or his father's customers"(66). I find Posner's stipulation that, essentially, people with wealth -- no matter how they acquired it -- are never parasites, rather, by definition, give more to society than they are taking. This just doesn't hold water.

For example, I could sell drugs (like heroin) to consenting adults who become addicted. Building an empire on my addicted customers I can rake in millions of dollars. Further, let's say their children become addicted, I make millions more. Even further, my son inherits the millions I built selling heroin to addicted customers. Does the fact that my son is holding money really indicate that he has given more to society than he has taken? Or, especially in this case, has he (or I) simply found a way to exploit consenting adults into giving him more? Did I really acquire my wealth by "doing things for other people" and "offering them advantageous trades?" (83) If you disagree because heroin isn't 'lawful' (as Posner stipulates these trades must be and I think in his world would be), replace heroin with cigarettes around the world and the effects are almost magnified.


2 ) Secondly, Posner makes another alarming claim:

"Suppose A, perhaps to provide money for his family (but the reason is unimportant), sells himself into slavery to B; or C borrows money from D with a penalty clause that in the event of default D can break C's knees. From a wealth-maximizing standpoint there is no economic basis for refusing to enforce either contract unless some element of fraud or duress is present" (86).

While Posner makes his tagline "unless some element of fraud or duress is present," he overlooks a key concept in economics: the lifeboat. The lifeboat situation is an example of market failure. Suppose you are in a lifeboat miles away from land and days before rescue. How much are you willing to pay for the only water on board? Truly, an unlimited or incalculable price (I think Kyla's post on "willingness to pay vs ability to pay" as value parallels this). Why? Because otherwise you will die. Interestingly, I think this simple scenario is not actually a market failure, rather, it illuminates an answer to a central point of contention: human life does have some sort of absolute intrinsic value; if it didn't, there would be a maximum price I would be willing to pay for water on the lifeboat. Just because I have $0, does not mean I value my life at $0. This is ludicrous.  So long as I am not in a lifeboat situation (I would argue the necessity to feed my family is one), markets may provide a good way of allocating resources to achieve human ends. That being said, so long as human ends are in conflict with the market mechanism itself, it appears, human ends ought to trump that mechanism.